1997 (7) TMI 81

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....section 256(2) of the Income-tax Act, 1961, the Commissioner of Income-tax, Pune, seeks a direction to the Income-tax Appellate Tribunal to state the case and refer the following questions of law to this court for opinion : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the penalty under section 271(1)(c) holding that an inadvertent mista....

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....o. 1 is concerned, in our opinion, the said question is also not a referable question of law as the answer thereto is obvious. The law is well-settled that an order imposing penalty is a result of a quasi-criminal proceeding, and penalty should not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest, or ....

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....It was further held that if the assessee was acting in honest and genuine belief in a particular manner, then no penalty could be imposed. In the instant case, there is a categorical finding of the Commissioner of Income-tax (Appeals) to the effect that the mistake of not including the value of titanium dioxide in the closing stock was inadvertent and bona fide and, therefore, did not lead to a....